Capital Markets: Observations & Insights

Speed of Innovation Is Accelerating Fundamentals

• Innovations are penetrating U.S. markets at an even faster pace ‒ “Growth” stocks should benefit from innovation while “value” stocks that appear cheap may simply be victims of change

Years from Market Entry to 50% Penetration in the U.S.

The faster speed of innovation may be exacerbating the disparity between growth and value fundamentals

120 160 200

0 40 80

Dishwasher - 1924 Air Con. - 1933 TV - 1936

PC - 1974

VCR - 1965

ATM - 1969

Stove - 1750

Radio - 1897

MP3 Player - 1998 Social Media - 2004

Wash. Mach. - 1904

Telephone - 1880 Roads - 1880

Internet - 1989

Railroad - 1830

Hospitals - 1776

Cable TV - 1950

Air Travel - 1914

Microwave - 1967

Steam ship - 1810

Newspaper - 1704

Credit Card - 1950

Smartphone - 1996

Second. Sch. - 1810

Electric power - 1882

Source: Asymco.

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